Summary of BRE Regulations Regarding Team Names and Fictitious Business Names

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1 Summary of BRE Regulations Regarding Team Names and Fictitious Business Names The BRE has issued a clarification recently of its team name and fictitious business name regulations. A salesperson can use a team name without obtaining a fictitious business name from the county recorder and without registering that team name with the BRE as long as the team name meets the following requirements: 1. The team name includes the surname of at least one of the agents in the team 2. The name is used by two or more real estate licensees who work together to provide licensed real estate services 3. The name does not include any term or terms, such as real estate broker, real estate brokerage, broker or brokerage, or any other term that would lead a member of the public to believe that the team is offering real estate brokerage services independent of a responsible broker. The terms associates, group or team are acceptable as long as there are at least two licensed real estate agents that are part of the group If you do not quality under the team name requirements, then you MUST register for a fictitious business name with the county recorder AND the Bureau of Real Estate BEFORE using the fictitious business name in any capacity. Attached to this memo are several articles from the BRE relative to these issues. Please review the attached forms entitled, Fictitious Business Name Information, Advisory and Guidance to Licensees Regarding Assembly Bill Pertaining to Fictitious Business Names & Team Names, and Advisory and Guidance to Licensees Regarding senate Bill Pertaining to Fictitious Business Names & Team Names. SB 146 provides that when a team name or fictitious business name is used in advertising, including print or electronic media and for sale signs it must include and display in a conspicuous and prominent manner, the team name and the name and license number of at least one of the licensed members of the team. In addition, it must include the responsible broker s identity including the name of the brokerage AND the brokerage s BRE license number. The same rule would appear to apply to advertising including open house and for sale signs for individual agents who are not part of a team. All such advertising should include the name of the agent along with the agent s BRE number and the name and BRE license number of the brokerage. The name of the brokerage should be at least as conspicuous as the agent s name. The form for filing for a fictitious business name can be found on the BRE website. Remember that you cannot obtain a fictitious business name without the signature of the broker of record for the office. Please contact management with any questions regarding these issues and PLEASE remember to abide by these BRE regulations.

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3 Advisory and Guidance to Licensees Regarding Assembly Bill 2018, Effective January 1, 2015, Pertaining to Fictitious Business Names & Team Names In 2014, the California Legislature passed and the Governor signed Assembly Bill 2018 ( AB 2018 ), amending Section and adding Sections and to the California Business and Professions Code ( the Code ). The provisions of these Code sections take effect January 1, AB 2018 specifies that a responsible broker may, by contract, permit a salesperson to (1) file an application on behalf of the broker with a county clerk to obtain a fictitious business name, (2) deliver to the bureau an application, signed by the broker, requesting the bureau s approval to use the fictitious business name to be identified with the broker s license number, and (3) pay for and maintain ownership of such fictitious business name that may be used subject to the control of the broker. The bureau has created a new form titled, Add/Cancel Salesperson Owned Fictitious Business Name Form (RE 247), that brokers and salespersons will use to add and/or cancel salesperson owned fictitious business names. The RE 247 will be available on the bureau s website no later than January 1, Once processed and approved by the bureau, the salesperson owned fictitious business name will appear on the responsible broker s license record. Furthermore, AB 2018 identifies specific disclosure requirements when salesperson owned fictitious business names are used in advertising, marketing, and solicitation materials. Additionally, AB 2018 defines a team name as a professional identity or brand name used by a salesperson, and one or more other real estate licensees, for the provision of real estate licensed services. AB 2018 specifies that the use of a team name, as defined above, does not constitute a fictitious business name and would not require a separate license if (1) the name is used by two or more real estate licensees who work together to provide licensed real estate services, or who represent themselves to the public as being a part of a team, group, or association to provide those services, (2) the name includes the surname (last name) of at least one of the licensee members of the team, group, or association in conjunction with the term associates, group, or team, and (3) the name does not include any term or terms, such as real estate broker, real estate brokerage, broker, or brokerage or any other term that would lead a member of the public to believe that the team is offering real estate brokerage services, or imply or suggest the existence of a real estate entity independent of a responsible broker. AB 2018 also provides, that when a team name is used in advertising, including print or electronic media and for sale signage, it must (1) include the licensee s name and license number, as specified, (2) include the broker s identity, as specified, and (3) not contain terms that imply the existence of a real estate entity independent of the responsible broker. The provisions set forth in AB 2018 do not change, reduce, or limit a real estate broker s statutory obligation to supervise salespersons operating under his or her license. Furthermore, any disputes that arise between the responsible broker and the salesperson regarding the ownership and/or use of a salesperson owned fictitious business name is a civil matter and would not fall under the purview of the Bureau of Real Estate. (12/18/2014)

4 Advisory and Guidance to Licensees Regarding Senate Bill 146, Effective July 16, 2015, Pertaining to Fictitious Business Names & Team Names Solicitations using salesperson owned fictitious business name must include employing broker s license identification number. In 2014, the California Legislature passed and the Governor signed Assembly Bill 2018 ( AB 2018 ), amending Section and adding Sections and to the California Business and Professions Code ( the Code ). The provisions of these Code sections took effect January 1, For additional information please see On July 16, 2015, the Governor signed Senate Bill 146 ( SB 146 ), which immediately makes a number of technical changes, as well as adding clarifying language, to provisions set forth in AB Most significantly, SB 146 clarifies the definition of responsible broker s identity to mean a name and the associated license identification number under which the responsible broker is currently licensed by the bureau and conducts business in general or is a substantial division of the real estate firm. Furthermore, the bill specifies a responsible broker s identity does not include a salesperson owned fictitious business name obtained pursuant to B&P (a)(2) or the use of a team name pursuant to B&P SB 146 also provides, that when a team name is used in advertising and solicitation materials, including print or electronic media and for sale signage, it must (1) include, and display in a conspicuous and prominent manner, the team name and the name and license number of at least one of the licensed members of the team, (2) the responsible broker s identity, as specified, and (3) not contain terms that imply the existence of a real estate entity independent of the responsible broker. Furthermore, SB 146 specifies that advertising and solicitation materials, including print or electronic media and for sale signage, containing a salesperson owned fictitious business name obtained pursuant to B&P (a)(2) include the name and license number of the salesperson who is using the fictitious business name as well as the responsible broker s identity, as specified. The provisions set forth in SB 146 do not change, reduce, or limit a real estate broker s statutory obligation to supervise salespersons operating under his or her license. Furthermore, any disputes that arise between the responsible broker and the salesperson regarding the ownership and/or use of a salesperson owned fictitious business name is a civil matter and would not fall under the purview of the Bureau of Real Estate. Special Note: In the Spring 2013 Real Estate Bulletin, the bureau confirmed general approval of fictitious business name requests, submitted by brokers, that include the name of salespersons (and which do not

5 include the broker s name in the fictitious business name), as long as specified conditions were satisfied. With the passage of AB 2018 and SB 146, as identified above, the bureau will no longer be implementing such policy. Therefore, in order for a fictitious business name, regardless if it is salesperson owned or not, to be added to a broker s license record it must, at a minimum, meet the requirements set forth in Commissioner s Regulation (September 28, 2015)